Varto Company has 9,400 units of its product in inventory that it produced last year at a cost of $153,000. This year's model is better than last year's, and the 9,400 units cannot be sold at last year's normal selling price of $52 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $84,600 or (2) they can be processed further at an additional cost of $241,700 and then sold for $319,600. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further
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- Denali Company manufactures household products such as windows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inventory purposes on December 31 included the following data on the unsold units: Denali can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window. Required: Identify the relevant costs and revenues for the liquidation sale alternative. Is Denali better off accepting the liquidation price rather than doing nothing? Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action—liquidate or reprocess.Varto Company has 10,600 units of its product in inventory that it produced last year at a cost of $150,000. This year's model is better than last year's, and the 10,600 units cannot be sold at last year's normal selling price of $46 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $116,600 or (2) they can be processed further at an additional cost of $208,200 and then sold for $318,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further $ 0 $ 0Varto Company has 7,200 units of its product in inventory that it produced last year at a cost of $154,000. This year’s model is better than last year’s, and the 7,200 units cannot be sold at last year’s normal selling price of $44 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $79,200 or (2) they can be processed further at an additional cost of $150,400 and then sold for $223,200.(a) Prepare a sell as is or process further analysis of income effects.(b) Should Varto sell the products as is or process further and then sell them?
- Varto Company has 10,400 units of its sole product in inventory that it produced last year at a cost of $35 each. This year's model is superior to last year's, and the 10,400 units cannot be sold at last year's regular selling price of $44 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $245,800 and then sold for $33 each. Should Varto sell the products as is or process further and then sell them? INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should.Schrute Company has 7,200 units of its sole product in inventory that it produced last year at a cost of $30 each. This year's model is superior to last year's, and the 7,200 units cannot be sold at last year's regular selling price of $40 each. Schrute has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $130,100 and then sold for $27 each. Should Schrute sell the products as is or process further and then sell them? INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should:Varto Company has 7,000 units of its product in inventory that it produced last year at a cost of $154,000 This year's model is better than last year's, and the 7,000 units cannot be sold at last year's normal selling price of 535 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $5 6,000 or (2) they can be processed further at an additional cost of $125,000 and then sold for $175,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? \table[(a) Sell or Process Analysis, Sell As is, Process Further). (Revenue..]. [Costs, Income..].[..],[Incremental income (loss) to sell as is..].[..], [(b) The company should...]]
- Varto Company has 12,400 units of its sole product in inventory that it produced last year at a cost of $23 each. This year’s model is superior to last year’s, and the 12,400 units cannot be sold at last year’s regular selling price of $51 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $13 each, or (2) they can be reworked at a cost of $254,100 and then sold for $33 each. Prepare an analysis to determine whether Varto should sell the products as is or rework them and then sell them. INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as isIncremental revenue Add: Incremental cost of processingIncremental net income(Loss) The company should:One of the products that Justine Corporation sells is “Extra Soft” floor mats. Justine’s ordering costs related to the mat is P12.50 per order. The cost of carrying one mat for one year is P16.00. Justine sells 40, 000 of these mats evenly throughout the year. 1. If, instead of following the EOQ, the company decided to place an order of 200 units per order, how much will be the total inventory cost?IT Company has 15,000 units in inventory that had a production cost of P3 per unit. These units cannot be sold through normal channels due to a significant technology change. These units could be reworked at a total cost of P23,000 and sold for P28,000. Another alternative is to sell the units to a junk dealer for P8,500. The relevant cost for IT Company to consider in making its decision is A.P45,000 of original product costs B.P23,000 for reworking the units C.P68,000 for reworking the units D.P28,000 for selling the units to the junk dealer
- Racine Co. determined its desiccated coconut inventory on a FIFO basis at P520,000 with a replacement cost of P400,000 based on physical inventory taken on December 31, 2021. After further processing costs of P240,000, Racine estimated that the desiccated coconut inventory could be sold as finished desiccated coconut candies for P800,000. Normal profit margin for Racine is 10% of sales. What amount should Racine report as desiccated coconut inventory in its December 31, 2021 balance sheet under the lower of cost or market value? a. P480,000 b. P520,000 c. P560,000 d. P400,000Kim Yin Company has 15,000 units in inventory that had a production cost of $3 per unit. These units cannot be sold through normal channels due to a significant technology change. These units could be reworked at a total cost of $23,000and sold for $28,000. Another alternative is to sell the units to a junk dealer for $8,500. By how much will they be better off?Kim Yin Company has 15,000 units in inventory that had a production cost of $3 per unit. These units cannot be sold through normal channels due to a significant technology change. These units could be reworked at a total cost of $23,000and sold for $28,000. Another alternative is to sell the units to a junk dealer for $8,500. Should Kim Yin Company scrap or rework the units? By how much will they be better off? Please provide the answers as well as the solutions to the questions. Thank you!